JAMES CAMERON, FILMMAKER/ACTIVIST: When we think of climate change, we think of coal fired power plants and tail pipe emissions. But the second biggest source of greenhouse gases is animal agriculture. So if you cut down on meat and dairy, you`re individually doing something right now to help the planet.

CHRIS HAYES, MSNBC HOST: Taking cars off the road. That is all for the evening. Mr. Cameron, thank you very much.

"THE RACHEL MADDOW SHOW" starts right now. Good evening, Rachel.

RACHEL MADDOW, MSNBC HOST: Good evening, Chris. Thanks, my friends.

HAYES: You bet.

MADDOW: And thanks to you at home for joining us this hour. Happy Tuesday.

Right now, right this second, we`re waiting on an event that is due to start tonight on the 2016 campaign trail. It is one of the stranger official events, maybe the sickle strangest official event that has yet been scheduled for this very strange campaign. And this event we`re waiting for the candidate to starts speaking tonight.

It`s weird for a very specific reason. As you have probably heard, Republican presidential front-runner Donald Trump is due to give that rarest of all things tonight. He`s going to give a policy speech. Mr. Trump has not done that yet on this campaign. But tonight he`s going to be giving a policy speech on foreign policy and national security. It is due to start in just a moment. He`s going to be delivering that speech, I kid you not, live from the deck of a decommissioned battle ship.

Now, there are a lot of funny and interesting things about that choice all of which we`ll be getting to tonight. But the really strange thing, the really unique thing about tonight`s event is that this event at which he`s about to speak is a fund-raiser. And Donald Trump is a presidential candidate really doesn`t do those. I mean, yes, he`s an unusual candidate but more than that, he is running a very unusual campaign. He`s the front-runner by a mile, right. As of today he`s been leading the race for the Republican nomination in 21 straight national polls not to mention leading in all the early states, as well, not to mention the fact that he`s leading in the home states of the other candidates.

For example, this new PPP poll out today in Florida, Donald Trump has more support in that state than Marco Rubio and Jeb Bush combined. And Marco Rubio and Jeb Bush are both from Florida.

Donald Trump is way out in front all across the country. No Republicans can really catch him anywhere. But he`s running his campaign in a strange way. Donald Trump, for example, has not run a single campaign ad. The entire time he has been running for president. Millions of dollars of campaign ads have been run all over the country already. Donald Trump has run zero of them.

Donald Trump is also not created a network of super PACs like all the other candidates have. He has not started a campaign fund-raising operation of his own. He literally doesn`t raise money. But tonight he is raising money. Tonight his speech on that battleship is a fund-raiser. But it is not a fundraiser for him or for his presidential campaign.

It is a fund-raiser for someone else and that turns out to be a very weird story. Which starts in South Dakota in the 2014 Senate race in South Dakota. You might remember that was a really weird Senate race. Democratic senator Tim Johnson announced he wouldn`t run for re-election. The Republican governor of the state then announced he would run for the seat, but he was embroiled in this complicated corruption scandal and his administration. In addition to him, a former Republican U.S. senator had been really popular in South Dakota but he left office almost 20 years ago, he decided he would run as an independent.

Then there was this kind of awesome Democratic candidate who barnstormed the state and did these little music videos and concerts everywhere. He was like folksy to the nth degree and people really liked him, the Democrat. It was a strange three-way race in South Dakota last year. And the Republican candidate, the governor ended up winning but it was suspenseful. It was mildly scandalous. It was hard to predict. It was strange.

And in that long weird Senate race last year, one of the minor candidates, who didn`t make it to the general election, the Republican who came in fourth out fifth in the Republican primary, this Republican South Dakota doctor and net boss worth. She had never run for office before. She has good reputation in the state. She got some good press in the state. She did a good job campaigning as far as I could tell.

Anything seemed possible in that very strange election last year, but in the end, that doctor and Annette Bosworth, U.S. Senate candidate, she ended up narrowly avoiding going to prison for a very long time because of something that happened to her during that campaign. She was tried and convicted of 12 felonies, 12 felony counts of perjury and filing false or forged documents. She could have gotten 24 years in prison for all of those felonies. Ultimately the court decided to not give her hard time. They gave her a few hundred hours of community service and some years of probation.

But 12 felonies is 12 felonies. And she was lucky to get off so easy. And the court explained when she was sentenced that part of the reason she avoided hard prison time on those election law violations is because of her past good record, her life up until is a manifestly good citizen.

Her explanation for what happened during the campaign and how she ended up committing all those felonies is that she says she was led astray by her campaign lawyer. This was her campaign lawyer. It is a man named Joel Arends. He was her personal lawyer. He was her campaign lawyer. He was her campaign advisor. She says the reason she signed all of these documents which led to these felony charges she says the reason she signed them all, these documents in which she legally attested to things that were not true and filed those untrue statements with the government, she says she only did that because he advised her she should do it.

Now, Joel Arends denied he did anything wrong. He denied any responsibility for what she did. But when she got caught and very nearly went to prison for 20 years, she was very clear that she blamed him. She said it was his fault. She raised the prospect also it was not just him making a mistake or being a bad lawyer.

When she got caught, she gave this fascinating press conference alleging that it might not have just been a mistake or bad advice from him. It might have been a dirty trick. She says she later discovered that although Joel Arends was her personal attorney and her campaign attorney and her campaign advisor, he was also apparently working for a political action committee that was supporting one of the other Republican candidates in the race. The Republican candidate who in fact went on to win the nomination.

She basically alleged that this guy who she thought was her friend, who she thought was working for her was secretly working for the other guy and giving her this purposely bad advice in order to knock her out of the race and indeed potentially to send her to prison as a dirty trick.

Holy moly. We reached out to and Annette Bosworth tonight. She stands by her story that Joel Arends advised her to file that illegal paperwork. At trial, Joel Arends denied any such thing but he really was at the center of one of the heinous (ph) and most lurid campaign stories anywhere in the country all last year.

Joel Arends has a pretty well-known history as a conservative activist. He did some work for the Koch brothers group, Americans for Prosperity. He is also had his names associated with a number of PACs some of which seem to be just him or him and very small numbers of other people. It`s kind of hard to tell.

But his latest PAC, his latest group is called Veterans for a Strong America. And veterans for a Strong America is where Donald Trump comes in. Donald Trump and his battleship tonight. Because we`re waiting for the speech tonight. But the last we heard from Donald Trump on national security was earlier this summer when Donald Trump did something, said something that really felt for a minute like it might kill off his campaign.

Donald Trump as a candidate likes to offend people, like to wild people up. But when this happened at the time, it really felt like it was the wrong thing to say and it was a potentially irredeemable political mistake.

(BEGIN VIDEO CLIP)

DONALD TRUMP (R), PRESIDENTIAL CANDIDATE: Insulted me and he insulted everybody in that room. I said somebody should run against John McCain who has been, you know, in my opinion not so hot, and I supported him. I supported him for president. I raised a million dollars for him. That`s a lot of money. I supported him. He lost. He let us down. But, you know, he lost. So I never liked him as much after that because I don`t like losers.

But Frank, let me get to it. He`s not a war hero. He`s a war hero.

UNIDENTIFIED MALE: Five-and-a-half years.

TRUMP: He`s a war hero because he was captured. I like people that weren`t captured, OK. I hate to tell you.

(END VIDEO CLIP)

MADDOW: That was July 18th this year even for somebody as proudly offensive as Donald Trump, a comment like about John McCain was trouble. All the other candidates in the race denounced him for saying it. The Republican Party denounced him for saying that. You could feel people recoil a little bit, even people who liked him otherwise.

But if Donald Trump was going to survive that political misstep, he was going to need some backup. Probably, it would be good to have backup specifically from veterans. So he got one. He got Joel Arends, the guy from South Dakota who had moved on from almost getting his candidate put in jail for 20 years to his latest super PAC.

Veterans for a strong America appears to be just Joel Arends. That doesn`t appear to be anybody else in the group. But when Donald Trump says what he said about John McCain`s war record, Joel Arends and his veterans for a strong America put out a statement blaming John McCain for it and saying all the right thing about Donald Trump.

Donald Trump tonight is doing a fund-raiser for veterans for a strong America starting his remarks right now. The end of the story about who he`s raising had money for.

Stay with us.

TRUMP: So I got here and they asked a couple of days ago, would it be possible to come over and say a few words an endorsement from your group with so many veterans, hundreds of thousands of veterans I really appreciate that, Joel. I did not expect it. I didn`t expect it. I didn`t ask for it. I will say this, I am with the veterans 100 percent. They`re our greatest people. They`re being treated terribly. The -- not only the number of deaths which are obviously that`s tantamount what`s going on is incredible. But as of two weeks ago on Wednesday, the vets had the longest wait in the history of the veterans administration, you go in and see a doctor, you wait for days, for days. And it`s not going to happen. Not going to happen. If I win, believe me, it`s not going to happen.

And one of the things I thought I`d do, and I`d stress so strongly, the veterans hospitals obviously they have problems. They`re not properly run. And when you have to wait long hours and long days and then in some cases have the doctor say I`m sorry, I`m going on vacation, believe me, it doesn`t get much worse than that.

So we`re going to create a whole new system. We`re going to take the system apart. And if they`re not doing the job, the veterans are going to go to private doctors, private hospitals, public hospitals.

(APPLAUSE)

TRUMP: And we`re going to reimburse those doctors and those hospitals. And you`re going to get the greatest service of any veterans in any country because you deserve it. And that`s going to be -- that`s going to be broken down into something that`s going to be very special.

Right now, and you know it, we have illegal immigrants that are treated better by far than our veterans. That`s not going to happen anymore. It`s not going to happen.

So Joel, I just really appreciate it. So unexpected to be here as an honor. They don`t build ships like this anymore, folks. You know? We don`t do them this way anymore. I actually said, what about re-commissioning? Look at this thing. The largest guns in the world. Most powerful guns. I learned a lot about the Iowa.

By the way, Iowa is a great place for a lot of reasons. You know, we have been treated so well in the state of Iowa, it`s been incredible. Number one on the polls and we love those people. They`re great. So this is a great ship. Hawkeye he goes. This is a great ship and that`s a great state.

I just want to say that we`re going to come out with some plans in a very short time. We`re going to be building up our military. We are going to make our military so big and so strong and so great.

(CHEERS AND APPLAUSE)

TRUMP: And it will be so powerful that I don`t think we`re ever going to have to use it. Nobody`s going to mess with us. That I can tell you. And we`re going to have a president who is respected by Putin, who is respected by Iran -- you know, let`s talk about for two seconds, let`s talk about the Iran deal.

Now, Obama, Obama and his people call him the supreme leader of Iran. Obama talks about the supreme leader. Well, I`m not calling him a supreme leader. But he said the other day that after this rip off deal is completed, he will never touch, do business with the United States again. We`re finished with the United States. They`re taking $150 billion. They`re getting a deal that`s going to go right into nuclear weapons. Much sooner than you think. They`re going to self-police. Think of that one. They are going to go and self-police. They got the 24 -- they have 24-day provisions.

And by the way, what people don`t understand, the 24-day provision doesn`t start, you know this right? It doesn`t start for a long time before you get to it. The clock is ticking. It could take forever. We may never get in there. It is one of the dumbest deals and one of the weakest contracts I`ve ever seen of any kind.

(APPLAUSE)

TRUMP: So we are going to do things in this country right. We`re not going to sign deals where we have four prisoners over there and they`re still there and we don`t even ask them one of them there`s there because he`s a Christian. We have a writer. We have the whole thing is absolutely insane.

You know, they asked the president, and they asked secretary of state Kerry who may be, you know I`ve been saying Hillary Clinton is the worst secretary of state in the history of this country, right. All right. I`ve been saying it.

But it`s possible, the worldly up around her. It blew up. Just blew up. The whole world is like a different place. It`s possible that because of this deal, made by secretary Kerry who has absolutely no clue how to negotiate, it may be that he`s going to supersede, and I understand that he may want to run for president. He has no chance like she has no chance. So we`re going to see what happens.

(APPLAUSE)

TRUMP: We have many problems in our country. One of them is immigration. Now, I took a tremendous hit when I brought up illegal immigration when I announced I was running for president. And for two weeks, I said, you know, Rush Limbaugh who is a great guy, he says he has suffered more incoming meaning the press than anybody I`ve seen.

So what happened is you have now found out what illegal immigration is all about. And I am so happy that I`m the one that brought it to the floor because believe me, it`s a big problem. It is a big problem.

So you remember for about two weeks, I said boy, this is tougher than I thought running for president. And then you found out there`s tremendous crime. There`s tremendous drugs pouring across the border. Tremendous beyond going to Chicago, going to New York, going to L.A., going all over our country. So the drugs pour in and the money pours out. Not a good deal. We get the drugs. They get the money. The drug cartels are going wild. They cannot believe how stupid our government is. They are making a fortune. The drugs come in, the money goes out daily. And I saw it because I was on the border. I was there. And we saw it. And everybody sees it every day. And we have the kind of people that can do something about it. But we have no leadership. None. None whatsoever.

(APPLAUSE)

TRUMP: So we`re going to build a wall. And Mexico`s going to pay for the wall. Believe me. You know, a lot of politicians have said, they`re not going to pay. They don`t know anything about -- they never read the art of the deal first of all.

So here`s the story. Here`s the story. I said the other day to one of my people, what is the United States trade deficit with Mexico, Japan and China? So let`s start with China. Almost $400 billion a year. Now, if you have a company where you`re losing $400 billion, you got to do something very fast. We`ve been losing hundreds of billions of dollars a year, frankly, for decades. Not going to happen anymore. Not going to happen anymore.

With Japan, where their massive ships float right here and they drop off cars, right, they drop off thousands and thousands and thousands of cars. Millions of cars. And we sell them beef. We sell them beef. And they don`t want it because their farmers don`t want our beef. They protest and they send it back, all right? It`s not going to happen that way anymore.

Now, with Mexico, and I love Mexico. I have many, many people, many, many people from Mexico that work with me and they work for me and they buy my apartments. Same with China. I have so many people, they pay me millions and millions. What am I supposed to hate China because they gave me millions of dollars to buy an apartment? I don`t think so. I have the largest bank in the world as a tenant. It`s from China. Bigger than any bank in this country by many times. They`re from China.

The problem we have is that the leaders of Mexico, Japan, China and every other country that we do business with, they`re smarter, more cunning, sharper than our leaders. I love free trade. The concept is great. But you need smart people. I have the smartest people in this country lined up. I know the smartest. I have Carl Icahn. I have the best business leaders and they all want to do it. They`re wealthy because they make good deals like me. I make good deals. You know, it`s a talent. You can`t be a politician.

Look, I`m fighting some very nice people even though I`m leading in the polls. But they`re very nice people. But they`re never going to do anything with these countries. They`re never going to be able to do it. It`s an instinct. It`s something that`s special. They don`t have it, believe me, they don`t have it. It`s going to be more of the same.

So we`re going to make our country so great. We are going to make it strong. We are going to make it powerful. We`re going to rebuild the military. We`re going to make it so strong. We are going to take care of our veterans.

And in the end, in the end, I want you people to look around and look at each other because this is going to be a special day. The other week, two weeks ago, in Mobile, Alabama, 31,000 people showed up in a rainy rough day, 31,000 people came to see us speak and we`re talking about making America great again.

Last night, in Dallas, at the American airlines center, 20,000 people, the basketball arena, of the Mavericks, 20,000 people showed up and I want to tell you, it was a love fest. Everybody -- there wasn`t -- think of it, 20,000 people. There wasn`t one heckler in the whole room. I kept saying there`s got to be one. There was a word, two words that used to be used a lot called silent majority. They stopped using them.

The silent majority, believe me, is back. And I think -- and I think we can use it somewhat differently. I don`t think we have to call it a silent majority anymore because they`re not silent. People are not silent. They`re disgusted with our incompetent politicians. They`re disgusted with the people that are giving our country away. They`re disgusted when they tell the border patrol agent who are good people and can do the job, they`re disgusted when they`re allowed to people just walk right in front of them and they`re standing them helpless and people just pour into the country. They`re disgusted when a woman who is nine months pregnant walks across the border, has a baby, and you have to take care of that baby for the next 85 years. They`re disgusted by what`s happening to our country. And you`re going to look around, you`re going to remember who the people are that are here because we`re doing something special. This is a movement. We`re going to make our country great again, believe me. We will make our country great again.

I love you all. Thank you very much. I love you. Thank you. Thank you.

MADDOW: Donald Trump giving what was supposed to be a foreign policy speech tonight from the deck of a battleship, moored in Southern California. There`s more to come tonight. There is something important about this event tonight as Donald Trump throws baseball hats to the crowd.

There`s something to this event in terms of who organized it. The organization that explicitly endorsed him at the start of it. Mr. Trump referred to it as an organization of hundreds of thousands of veterans for which this was actually a fund-raiser tonight. This is not a presidential fund-raiser. It was a fund-raiser for that, quote-unquote, "group." And that backstory to what just happened here tonight, this fiasco that was supposed to be a foreign policy speech. But yes, right, that back story is even more an amazing than what we just saw and that`s next.

(COMMERCIAL BREAK)

MADDOW: We`re used to politicians particularly those without a military background speaking from battleships. We`re used to politicians doing fund-raisers, but usually they`re for themselves. Tonight, Donald Trump has taken one of those cliches and lived it to the utmost. He has taken the other one, turned it completely on his head in a way that I can`t believe isn`t the headline story across the country in every form of political media tonight.

Stay with us. That`s next.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TRUMP: He insulted me and he insulted everybody in that room. And I said somebody should run against John McCain who has been in my opinion not so hot and I supported him. I supported him for president. I raised a million dollars for him. That`s a lot of money. I supported him. He lost. He let us down. You but you know, he lost. So I never liked him as much after that because I don`t like losers. But Frank, let me get to it. He hit me.

UNIDENTIFIED MALE: He`s a war hero.

TRUMP: He`s not a war hero.

UNIDENTIFIED MALE: Five-and-a-half years in a POW camp.

TRUMP: He was a war hero because he was captured. I like people that weren`t captured, OK. I hate to tell you.

(END VIDEO CLIP)

MADDOW: He`s not a war hero. I like people who weren`t captured, OK.

Here`s what just happened tonight on that freaking battleship. This is what happened. This is why it happened. This is it. When Donald Trump said that unbelievably offensive and disrespectful thing about John McCain`s heroic war record, a group called veterans for a Strong America, a group run by a guy named Joel Arends put out a statement backing up Donald Trump for what he said about John McCain. They put out a statement basically blaming John McCain for that and a saying all the right things about Donald Trump. They put out the statement quote "the feuding between Mr. Trump and Senator McCain has nothing to do with Mr. Trump`s high regard for the military or veterans as a whole. Mr. Trump is a supporter of the U.S. military and of America`s veterans. It`s well-known that when Mr. Trump is attacked by a detractor he swings back. As veterans we do not hide behind military service to deflect criticism. And when Senator McCain attacked Mr. Trump, Mr. Trump hit back."

I`m sure at that moment, when everybody in the political world was taken aback by him saying John McCain is not a war hero, I`m sure in that moment, Donald Trump was very grateful to have that statement of support from this group, what are they called, again? Veterans for a strong America.

But Veterans for a Strong America really does appear to be just one guy. This is not IAVA. This is not Iraq and Afghanistan Veterans of America. This is not Disabled American Veterans. This is not Veterans of Foreign Wars. This is apparently just a guy named Joel from South Dakota.

The most recent FEC filing for Veterans for a Strong American action group, the PAC for this group, shows they have $30 in the bank. Against that is $30 cash on hand, they have debt and obligations totally $318 payable to something called Red State Productions, which also appears to be just this guy Joel from South Dakota.

And Veterans for a Strong America operating out of the same post office box and led by that one guy Joel, that, quote/unquote, "group", that group is going to be the recipient of the funds raised tonight from this night on a battleship with Donald Trump. It was supposed to be his big foreign policy speech. It was a fund-raiser for that guy.

I mean, biggest juggernaut in Republican politics tonight, raising money at this event for Veterans for a Strong America. Tickets were up to $1,000 a pop. That alone would be more than 300 -- I mean, how -- it`s weird enough to see a candidate like Donald Trump be the front-runner for the Republican nomination. It is weird enough to see him campaigning for president standing on a decommissioned battleship when his only connection to the military is that he went to a military prep school in the 1960s.

Even though Donald Trump never served in a military and got multiple deferments to avoid service in the Vietnam War, he told his biographer he believes he did be in the military because of that expensive prep school experience. He told his biographer, quote, "I felt that I was in the military in the true sense."

Donald Trump was not in the military, but he did use a pretty military backdrop tonight to raise money for a nonexistent veterans group, which endorsed him formally as part of his introduction. And he said they have hundreds of thousands of members. And they don`t.

And so, the whole thing is fake. The whole thing is made for TV, except for the fact that presumably he did raise money for this guy tonight. And this really is the front-runner for the Republican nomination for president of the United States by a mile. And so far, Republican voters do not seem to care that it is all made up.

Joining us now Steve Schmidt, MSNBC political analyst, senior advisor to the `08 campaign of Senator John McCain.

Steve, it`s great to see you, my friend.

STEVE SCHMIDT, MSNBC POLITICAL ANALYST: Good to see you, Rachel.

MADDOW: This wasn`t a foreign policy speech. I didn`t like zone out and miss it? This was -- what just happened?

SCHMIDT: Well, you saw Donald Trump today going out in new episode of the reality show that he`s producing and starring in. And that`s dominating the Republican nominating process.

Shouldn`t be confused about the message he`s delivering. He`s very simple and something that Republican voters profoundly believe to be true. Republican voters believe that President Obama has succeeded in his mission to bring fundamental change to the country. And they believe he has wrecked the country.

And in that statement, "Make America Great Again", there already three component parts: we were once great. We know longer are. We can be again.

He is saying something that rings true to millions of people across this country that none of the other candidates have the courage to say. And it`s having great resonance with the base of the Republican Party.

MADDOW: Why does the Republican electorate believe that there`s nobody who is a actual Republican who can make America great again?

SCHMIDT: So, for example, let`s look at the 50, 60, 70, how many votes it was to repeal Obamacare. The Republican base is sick of the play-fighting. They`re sick of the empty promises, the position papers that have no meaning.

Every day that Donald Trump goes out there and he talked about this, when he made his offensive comments about immigrants at the beginning of had his run, did he back down? No. He doubled down. Despite losing millions of dollars in endorsement deals, he showed in a moment he was incorruptible. He would speak truth to power as he sees it.

MADDOW: Incorruptible.

SCHMIDT: Well, he wouldn`t back down, he couldn`t be bought off. He wasn`t another kowtowing special interest politician who would bow down and apologize under a censorious media.

And so, Trump every day, whether it`s the fight with Roger Ailes, whether it`s his attacks on Jeb Bush, is showing he is strong. That he has the ability to do what he says he can do which is to go into a room with these foreign leaders and make America win again.

MADDOW: It`s also made up. In the sense that he doesn`t -- he`s not campaigning on anything that he could do as a president or that he understands as president. For example, he says the way that you beat ISIS is by electing Donald Trump and then there`s a secret plan that will defeat ISIS. I don`t believe there is a secret plan. He says the way that we will -- I mean, when was just describing, you and I were trying to do the math, he was describing America`s trade deficit as if it is America`s budget deficit. He was talking about the money that is Iranian assets froze in the United States as if it is taxpayer dollars being paid to Iran as part of this deal. It`s not real.

SCHMIDT: There is precedent -- there is precedent for a presidential campaign running on a secret plan to end a war. Richard Nixon, of course, in 1968.

MADDOW: Sure.

SCHMIDT: I`m entirely willing to grant that the fight on "The Apprentice" between Meatloaf and Gary Busey was completely made up, as well. Doesn`t mean it`s net less compelling television. So we`re at this moment where there`s a severability now between issues and conservatism.

The test of conservatism is increasingly rhetorical. It`s an emotional sentiment. Who is a conservative now is the person with the hottest rhetoric. Who is a real conservative is who has fidelity to the person with the hottest rhetoric.

So, we have 60 percent of the Republican electorate supporting outside candidates who have never held elected office at the expense of the establishment elected politicians of the party. So, we`re at this interesting moment here, and for sure, Donald Trump at this moment is in complete total absolutely control of the battle space of the nomination fight.

And the one commonality that he has with Bernie Sanders is this -- you have on both the left and you have on the right millions of Americans looking at the system saying it`s not on the level. They`re not buying it anymore. It is an expression of tremendous contempt towards the political elites, governing elites of the country. I think you`re going to see that sentiment continue to grow over the course of the months ahead.

MADDOW: Although you can ask Democratic voters about that, if you ask them do you want a leader who has been inside the system and knows how to make it work, Democratic voters say yes, Bernie Sanders lifelong politician.

SCHMIDT: Sure.

MADDOW: Republican voters by the exact same margin say no. And so, there is something different. It`s interesting to see them as unlikely candidates and therefore, it feels a little bit like a mirror image but there is something about Republican voters that hate Republican leadership.

(CROSSTALK)

SCHMIDT: There`s no question that that`s true. But there is commonality in the sentiment of contempt towards the system --

MADDOW: Toward the system.

SCHMIDT: -- that both sides look at and say is not on the level.

And let`s be clear: we live in a time where trust has completely evaporated between the American people and very nearly every institution in the country with the exception of the military being the outlier to that, which is why all of these politicians try to cloak themselves in the U.S. military as they run for office whether they`ve had military service or not.

MADDOW: And whether or not the veterans groups they`re fund-raising for on any given Tuesday evening are actual organizations.

Steve Schmidt, MSNBC political analyst, senior advisor to the `08 campaign of Senator McCain -- thank you so much, Steve. It`s great to have you.

SCHMIDT: Great to see you, Rachel.

MADDOW: All right. We`ve got much more ahead tonight. Please stay with us.

(COMMERCIAL BREAK)

MADDOW: Donald Trump just wrapped up what was suppose to be a major foreign policy speech tonight on the deck of a battleship, decommissioned battle ship the USS Iowa. It was not at all a major foreign policy speech. It wasn`t even a major Donald Trump saying nothing speech.

But one of the features of that event tonight was the number of protesters who were outside the event both before and during and now that the event is over peeling off.

Joining us now is correspondent Katy Tur who has been following Mr. Trump and at the event tonight in L.A.

MADDOW: Tell me who turned out because they weren`t a fan of Donald Trump tonight.

TUR: A lot of local people from the area actually came out here to say they did not agree with Donald Trump`s policies and did not agree with him standing on top of the USS Iowa. They didn`t like what that symbolized him being on a U.S. historic boat here, and saying the things that he says. They don`t agree with his immigration policy.

When he started speaking about immigration, he got really loud boos from the protesters out here, screaming, booing. So much so you could very much hear it up there on that stage. It might be why his speech lasted only about 14 minutes. He got into none of those policy specifics he claimed he was going to get into tonight, instead threw a few "Make American Great Again" camo hats out into the crowd.

Now, they`re going to do some debate prep. They are focusing on foreign policy, that they are fully expecting to get hit by the other opponents. They say whenever they do that, it`s just because the other opponents are running 3 percent, 4 percent in the polls and need to stand out in some way. That`s why they`re attacking Donald Trump.

Do expect to see him attacking back if he is attacked. As for the protesters that were here, we asked him, what does he think of these protesters? He ignored that question, instead waved to them before he got into his black SUV and just drove away.

MADDOW: Katy, one of the things unusual about this event is that it was a fund-raiser but not for the candidate. It was for a group called Veterans for a Strong America. As far as we can tell, Veterans for a Strong America is just one guy. Mr. Trump today talking about them as a group of hundreds of thousands of veterans. There may just be some confusion here, or I`m not sure if Mr. Trump knew exactly who he was dealing with.

Was there any big organizational impact of some group of hundreds of thousands of veterans there tonight that we couldn`t see from here?

TUR: No, that doesn`t seem to be the case in who was showing up. These are people who bought tickets. The proceeds either $100 tickets to $1,000 tickets allegedly are going to go to this group.

I`m not sure what this group is, as you`re not quite sure what this group is. All we know is it`s a conservative group that claims it supports Iraq and Afghanistan veterans. I don`t know the organizational structure of it. I don`t know exactly how this group sends out their money.

But that`s what we do know. There were 853 people who attended tonight`s event. It`s unclear who paid what amount or how much money was in fact raised, but it wasn`t quite the 1,000 people that the campaign had been claiming. Again, who Veterans for a Stronger America is, I couldn`t quite tell you at this moment, Rachel.

MADDOW: Katy Tur, NBC News correspondent in L.A. at the Donald Trump speech tonight. Thanks for your time tonight, Katy. Good to have you here.

I will say, again, the PAC for this group as far as we can tell from their latest FEC filings had $30 in the bank and $318 of outstanding obligations. So, if Donald Trump got them a few thousand dollars tonight, that will fundamentally transform them as an organization.

We`ll be right back.

(COMMERCIAL BREAK)

MADDOW: It turned out to be the very unexpected buzzword of the 2012 vice presidential debate. Remember this?

(BEGIN VIDEO CLIP)

JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: With all due respect, what`s a bunch of malarkey.

(END VIDEO CLIP)

MADDOW: A bunch of malarkey. The vice presidential debate between Joe Biden and Paul Ryan in 2012 caused the word malarkey to trend nationwide on Twitter.

Now, though, malarkey is back in the best possible way. And that`s ahead. Stay with us.

(BEGIN VIDEO CLIP)

BIDEN: With all due respect, what`s a bunch of malarkey.

(END VIDEO CLIP)

MADDOW: This was seven years ago today.

(BEGIN VIDEO CLIP)

ANN CURRY, NBC NEWS: Our top story here this morning, overseas is markets tumbled had morning amid word that one of the world`s investment firms, Lehman Brothers, is filing for Chapter 11 bankruptcy. What more fallout can we expect on this from the economy and also stocks at home?

MARIA BARTIROMO, CNBC: Good morning, Ann. There is a near term fallout and mid to longer term fallout. The near term is we are looking at a severe selloff today. The U.S. stock market under pressure as people worry about the ripple effects of the Lehman bankruptcy.

(END VIDEO CLIP)

MADDOW: That was seven years ago today. We now know what that ripple effect was when the financial giant Lehman Brothers suddenly collapsed seven years ago today. We now know it was the first smoke alarm for the fire that basically burned down the entire global financial system that year.

Today is the seventh anniversary of the one of the scariest economic times in the recent American history, the near collapse of the entire American economy. In one sense, this was a hey, we made it, we survived it anniversary.

But it`s also an uncomfortable anniversary for a select few. Republican presidential candidate John Kasich served as managing director of Lehman Brothers from 2001 right up until the company`s collapse seven years ago today. In 2008 alone, the year Lehman collapsed, John Kasich earned more than $600,000 from Lehman. Governor Kasich said recently that, quote, "he learned a lot about the way America works" during his time at Lehman brothers.

Really? Do tell! Do you mean the catastrophic collapse and bankruptcy or after? Also, there`s Jeb Bush, who served as a Lehman Brother`s adviser for years, before the bankruptcy, through the bankruptcy, and onto Barclays, once Barclays inherited the smoking rubble of what Lehman used to be. Lehman paid Jeb Bush more than twice what they paid John Kasich during these disastrous days.

So, happy anniversary to us, but particularly to the guys in the middle of the disaster making tons of money off of it when it almost destroyed the entire economic world. Good luck with the campaign, gentlemen. Happy uncomfortable anniversary.

(COMMERCIAL BREAK)

MADDOW: In the vice presidential debate in the last election cycle, the moderator was Martha Raddatz. A great reporter for ABC. She`s known for her foreign affairs chops and her war reporting, her all-around expertise on security issue answer foreign policy.

For Vice President Biden whose decades in the Senate had included being chair of Senate foreign affairs, Martha Raddatz running debate was a pretty good match for Biden. But those issues were not a strong suit of the vice president`s opponent in that vice presidential debate. They were nothing that he really worked on before. And so that whole debate did not go great for him.

(BEGIN VIDEO CLIP)

REP. PAUL RYAN (R), WISCONSIN: The more brazen their attacks and our allies are less going --

BIDEN: That`s a bunch of malarkey.

MARTHA RADDATZ, MODERATOR: And why is that so?

BIDEN: Because not a single thing he said is accurate. First of all --

RADDATZ: Be specific.

BIDEN: I will be very specific.

(END VIDEO CLIP)

MADDOW: That was the first mention of malarkey in the vice presidential debate in the last election. It was not the last.

(BEGIN VIDEO CLIP)

BIDEN: I was in a conference call with the president, with him talking to be for well over an hour. In stark relief in detail what was going on. This is a bunch of stuff. Look, here`s the deal.

RADDATZ: What does that mean, this is a bunch of stuff?

BIDEN: Well, it means, it`s simply inaccurate.

RYAN: It`s Irish.

BIDEN: It is. We Irish call it malarkey.

(LAUGHTER)

BIDEN: But last thing, the secretary of defense made absolutely clear, you can`t walk anything back. We will not allow the Iranians to get a nuclear weapon. What be held up there was, when they get to the point where they can enrich uranium enough to put into a weapon. They don`t have a weapon to put it into. Let`s all calm down a little bit here.

Iran is more isolated today than when we took office. It was on the ascendancy when we took office. It is totally isolated.

RADDATZ: Congressman --

BIDEN: I don`t know what world these guys were in.

RYAN: Thank heavens we had these sanctions in place it was despite their protests.

BIDEN: Oh, God.

(END VIDEO CLIP)

MADDOW: Vice President Biden laughing at his opponent, Congressman Paul Ryan, in that debate. That became sort of what debate was like. Had that debate been more in the wheel house, budgets or something, it might have gone better. But a lot of it was about foreign policy and military issues and Paul Ryan seemed over his head. And Joe Biden laughed in his face in that whole 90-minute joyride of a debate.

Now, the Republican presidential candidate in 2012, Mitt Romney, he was also not known for his expertise on national security or foreign affairs. When he picked Paul Ryan to be his running mate, it seemed like a sign of confidence that Mr. Romney hadn`t picked somebody with national security chops to compensate for his own obvious lack of them. Mr. Romney and Paul Ryan basically picked a mini-me, someone with the same interest, same basic expertise.

In so doing, it was clear they just thought national security would not be that important an issue in the election of 2012 and that`s how they behaved. During his whole acceptance speech for the nomination, Mr. Romney never once mentioned that the country was at war and had been for over a decade.

And, for Paul Ryan, nothing was worse than that national security-oriented debate in which he got laughed at for his school kid crammed answers on a subject he didn`t seem to understand.

But the moment they probably got it worse in 2012 was at the announcement of Paul Ryan as running mate in the first place. It did not go well and the setting of where it didn`t go well made it all the worse.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), FORMER PRESIDENTIAL CANDIDATE: Join me in welcoming the next president of the United States, Paul Ryan.

PAUL: Wow. Hey. And right in front of the U.S. Wisconsin, huh? Man!

ROMNEY: Hold on, hold on. Every now and then I`m known to make a mistake. I did not make a mistake with this guy.

But I can tell you this, he`s going to be the next vice president of the United States.

(END VIDEO CLIP)

MADDOW: Mitt Romney introducing Paul Ryan as his running mate or maybe his replacement. Randomly introducing him on a decommissioned battleship.

This was in Virginia, they made the announcement on this battleship in Virginia even though neither of them has any military background at all. Because it was in Virginia, they were introduced by the state`s governor, who was an army veteran and who had been in the shortlist to be picked himself as Romney`s running mate but they picked Paul Ryan.

So, Bob McDonald had to go through the humiliating standing by the guy you lost out to routine, because life his become considerably worse since then and he`s now on his way to federal prison. But that battleship setting, it was a bad idea for a backdrop for Mitt Romney. It pointed out their shortcomings more than anything else. It was also a bad idea last year when Mitt Romney chose a decommissioned aircraft carrier to give his speech to the RNC in which he said he would maybe run for the presidency only this time he would focus on national security, which presumably would mean more speeches on ships.

After George W. Bush`s "mission accomplished" speech on that aircraft carrier in 2004, using a naval ship as a substitute for knowing what you`re talking about would fallen out of favor, but tonight it was Donald Trump. He was supposed to give his first policy speech, a subject he`s never spoken on before the U.S. Iowa was supposed to make you think of future commander-in-chief. Forgive me if it made you think instead of a bunch of malarkey.

That does it for us tonight.

Now, it`s time for "THE LAST WORD". Ari Melber sitting in for Lawrence tonight. Hi, Ari.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.END

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